FTC Informal Staff Opinion: Green (09-17-96)

[David A. Szwak]

http://www.ftc.gov/os/statutes/fdcpa/letters/green.htm
UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, D.C. 20580

Division of Credit Practices
Bureau of Consumer Protection


September 17, 1996

Paul H. Green
CEO
Cross Check, Inc.
6119 State Farm Drive
Rohnert Park, CA 94928-2146

Dear Mr. Green:

Thank you for your letters to David Medine of June 27 and July 30, 1996, concerning the check guarantee industry and its coverage by the Fair Debt Collection Practices Act (FDCPA) . David has asked me to respond to them; I apologize for the delay.

I enclose for your information copies of two amicus briefs filed by the Commission in the Seventh and Ninth Circuits which address some of the issues raised in your letters. They represent the current position of the Commission concerning whether the check guarantee industry is covered by the FDCPA. In addition, it is our belief that, no matter how the activities are portrayed or disguised, check guarantee companies are not "creditors" under Section 803(4) because, in the last analysis, they still routinely attempt to collect third party checks that have been dishonored by the bank. The collection function is an integral part of the business.

I hope that this respond to your inquiry.

Sincerely,

John F. LeFevre
Attorney

Enclosure